KARACHI: Ten banks found themselves in the crosshairs of the State Bank of Pakistan (SBP), for violation of Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) provisions.

Collectively, the fines add up to Rs805 million, and all actions were taken in the month of August. The SBP followed up the action by making public the amount of the fines imposed on each bank, as well as citing the reasons and deficiencies that led to the penalties, something it had announced in early August will be standard practice from now on.

The strict actions and penalties, as well as their public disclosure, suggests that the issue of AML/CFT compliance is being pursued by the regulator under strict guidance from the Financial Action Task Force (FATF) to help pull the country out of the grey list.

Details show that the largest fine is of Rs320m, with the second largest at Rs159.2m and all others far below this amount. The violations pegged range from AML/CFT to “erroneous deduction of service charges from customers” to poor implementation of Know-Your-Customer policies as well as inadequate monitoring of asset quality.

In one case. the violation included failure to monitor large cash transactions, where the SBP ordered an internal inquiry, and in another case it involved “violations of foreign exchange regulations such as restrictions to remit import advance payments, export documentation and non-submission of documents against advance payments.”

Published in Dawn, September 7th, 2019